ATO Push on Ebay / Gumtree etc

I have noted a proposed budget allocation to increase the scope of ATO audit and datamatching in the area of personal assets. Appears that it is believed many people are trading in assets that could be subject to CGT on websites and ATO want a cut. These people are believed not to hold ABNs and are appearing to be small one-off sellers but often they do have regular sales.

Here are the broad CGT issues : Guide to capital gains tax 2012-13 | Australian Taxation Office

Most taxpayers think of CGT assets as property, shares and investments but a far broader range of assets are subject to CGT : Art, antiques, drawings, maps, framed items, sculpture, ceramics, aboriginal / cultural artefacts etc. These assets can be described as collectables or personal use assets and each has special rules.

Personal use assets costing $10K or more are subject to CGT if a profit is made. eg boat, antiques (that arent a collectable / set). Collectables which cost under $500 (item or set) are excluded but coins, stamps, books, manuscripts etc may also be subject to CGT.

 

Further to this the ATO has demanded information on collectables and antique insurance policies this year so for the first time they'll have some sort of register of those types of assets. Essentially anyone who had an insurance policy on a collectable item and no longer does should expect a please explain from the ATO.

Only makes sense as their databases get more comprehensive that it will become more and more difficult to avoid paying the CGT that you should.

 

So if buy a personal use assets below $10K and sell it above 10K it is still ok?

 

Wow. Any reference for this?

 

It's been widely pushed to accounting firms over the past month. Below is the official ATO communication:

Lifestyle assets and capital gains tax | Australian Taxation Office

 

Not if could be part of a set eg a library of manuscripts, maps, etc

 

Pretty soon a tax return will become optional.

The data matching program could be a comprehensive assets betterment statement from which default assessments could be raised.

Hmmm ... I should shut up before Treasury and the ATO start considering this seriously !

 

They are throwing 100+ staff to this and using the you-beaut cray supercomputer. Same project also looking at massive range of state and govt records on property ownership and undeclared property revenue. Some info to be used to identify foreign property both here and overseas too. The chief contractor managing this is a huge US defence contractor. (Defence host the site)

I didnt realise the computer needed a special budget allocation cause it costs so much to operate and due to its location inside defence. Abbott did a great job at reducing red tape and waste.

 

It had to come eventually.

We have a scenario now where each successive generation is getting better at and more comfortable with buying and selling on-line, both locally and O/S.

Many of these folks are - will continue to - buy and sell below the $1,000 threshold to avoid paying GST, and many will operate at just below the level required to have to register for GST and/or ABN.

The ramification is that as "shop front" retail sales decline as a result of this, we will see more redundancies and scaling down of both jobs and shopfronts for folks to buy from.

The other problem is the costs of sales, utilities and fixed costs for the shopfronts aren't decreasing, so a further decline in sales will occur as the shop fronts struggle to compete with the much lower overhead on-line business.

Some will no doubt be able to adapt to a degree by implementing their own on-line business, of course.

Here we all are in Aus wanting to slam the "big boys" for not paying their fair share of tax, and complaining how the service (in shops) is poor, the cost is too high, it's more inconvenient etc to visit shop front stores...

Yet; we want the cheapest products, and want to dodge paying tax on our online purchases and sales, as well as keeping our jobs and growing the economy and employment possibilities, paying less tax and getting a payrise.....

It's an equation that is not going well.

 

Yep and then they turn all of those shops into coffee shops and gyms

 

Or empty 1 bedroom apartments held by foreign investors.

Yet domestic investors are the demons by using negative gearing to acquire and make available residential dwellings for families to live in at very low yields.

 

GST costs more to collect than it raises in relation to small purchases.

So we will be introducing GST on low value imports more as a punishment to consumers that will need to be partially funded by further taxes to pay for the collection costs.

 

Yes I havent seen how the braniacs in Canberra intend this to operate - It could be like the old super surcharge or mining tax. Cost twice what it brings..

IMO it wont stop me buying a thing offshore and may make a smaller problem much worse. I just bought three airplane headphone stereo adapters (2 prong). Buy here $10 each. Ebay China $3 delivered for three.

 

The GST on purchases under $1000 has to be the stupidest policy in a while.

It's basically kowtowing to retail lobbyists to get their support and taxpayers get to pay for it twice, with our income taxes that will cover the loss on the initial tax that we also pay.

It's just ridiculous.

 

UK and other countries are doing same. And introducing "google / netflix type taxes" too. Gerry Harvey will rue the lobbying he made when more and more offshore retailers out play him with fast delivery, low prices and quality. Gerry just levelled the playing field so cheaper offshore suppliers can still be cheaper with GST. He may drive people to buy offshore and the Govt will not lose.